wprager

SpezDispenser wrote:It's pretty silly. The NHL has operated under the last CBA and now they're saying they need a reduction in the % - why can't the players understand that?

Because employers always want to cut salaries and employees usually want to make more money. No different than anywhere else in the workforce.

I think if one looked at the percentage of revenues that go to salaries in the "real world" that percentage would often be higher than what the company ends up with for other expenses and, hopefully, profit.

Have you *ever* worked for a share (no matter how small) of the *revenues*? Has *anyone*?

SeawaySensFan

SpezDispenser wrote:It's pretty silly. The NHL has operated under the last CBA and now they're saying they need a reduction in the % - why can't the players understand that?

Because employers always want to cut salaries and employees usually want to make more money. No different than anywhere else in the workforce.

I think if one looked at the percentage of revenues that go to salaries in the "real world" that percentage would often be higher than what the company ends up with for other expenses and, hopefully, profit.

Have you *ever* worked for a share (no matter how small) of the *revenues*? Has *anyone*?

It is *extremely* different from anywhere else in the workforce.

Now, is that *enough* asterisks?

That part was in response to a different post. I got he idea that the poster thought that 57 percent was excessive.

sandysensfan wrote:That insane proposal you mentioned was 43%. The Owners operated off that last season, plus paid all their teams' operating expenses. So if that was an insane offer for them to give to the players... what do the players think of the Owners having 43% last season with paying expenses?

Furthermore, any *company* that sells a *product* or *service* pays their *employees* out of the receivables from those sales or *revenue*, if you will, thus *a* portion or share of that revenue *goes* to pay said employees.

As I said, salaries are funded through revenues and that portion of revenue is often higher than 50 percent. Just as it was in the NHL under the last CBA and, therefore, very much, in that regard, like the general workforce.

The percentage of your operating expenses devoted to salaries will depend on the type of industry you are in. Utilities and manufacturing industries have large infrastructure costs that generally make up a much greater portion of their spending than salaries. Consider these Bureau of Labor Statistics numbers as a guide: Industries with the highest median percentage of operating expenses devoted to salaries in 2008 included the health care industry, with a 52 percent ratio, and for-profit services, with a 50 percent ratio. The lowest were durable goods manufacturing at 22 percent, construction/mining and oil/gas at 22 percent and retail and wholesale trade at 18 percent.

Read more: What Percent of My Business Should Be Used for Salaries? | eHow.com http://www.ehow.com/info_7751111_percent-business-should-used-salaries.html#ixzz26XpQu8kF

Players' take is 57%. GMs and coaches typically are $1M+ each, so let's say $3M against an average payroll of ~$50M (basing this on a 21 man roster at a $2.4M average salary) that's another 3.4% of revenues ($3M is 6% of $50M, and if that $50M extrapolates to 57% then 6% of that is 3.4% of revenues).

So with just payers, coaches and GMs you are already past 60% of revenues. And you've got assistant coaches, video coaches, goaltending coaches, trainers, physiotherapists, doctors, nutritionists, scouts, accountants, league executives, office personnel. Probably getting close to 65% if not higher.

Also, I'm not sure if that 57% represents salaries only or payroll taxes as well. Using a US payroll tax calculator, an average $2.4M salary will result in roughly $40K in payroll taxes, which is $840K for a 21-man roster. In Canada payroll taxes include CPP and EI only so you max out way before $2.4M. Assuming it's similar in the US I think it's ok to just assume that $40K would not increase for higher-earning players. It's not too much of a stretch to assume that that $840 per club goes up to $1M pretty quickly with coaches, scouts, GMs, etc. So I think it's safe to say that salaries, including payroll taxes, represent the high 60s as a percentage of revenues. That *is* unusual, to say the least.

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